Services firms in the developing world: An empirical snapshot

Abstract

This paper paints the first empirical portrait of services firms in the developing world. Compared with manufacturers, service providers are smaller, but growing faster. They are more productive, pay higher wages, and invest more heavily than manufacturers, but are less likely to export or to receive inward foreign direct investment. Among service providers, internationalized firms display similar characteristics to internationalized manufacturers: they are larger, employ more workers, pay higher wages, invest more heavily, and grow faster. Although these premia are generally more pronounced for goods exporters than for services exporters, the reverse is often true for foreign-owned firms.

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